Intro
In this episode of “The Jordan B. Peterson Podcast,” Jordan Peterson interviews Terrence Keeley, a BlackRock executive and expert on impact investment and ESG (Environmental, Social, and Governance) investing. They discuss the perils, pitfalls, and promises of ethical investing, as well as the importance of faith, sustainability, and inclusivity in shaping a better future.
Main Takeaways
Impact Investing and ESG
- Terrence Keeley is an expert on ESG investing and is skeptical about ethical investing strategies.
- The ESG movement cannot be understood without the context provided by the United Nations and the events since the Second World War.
- ESG principles emerged in 2005 with the goal of promoting sustainable development.
- Over 6,000 signatories to the United Nations principles for responsible investment collectively manage 120 trillion in assets.
- ESG rules have had unintended consequences, such as the Bud Light commercial that resulted in negative outcomes.
- ESG enthusiasts tend to exclude certain stocks, like oil and gas, deeming them non-virtuous, which is not a practical approach.
- The historical concept of socially responsible investing did not stop unethical practices from continuing due to profitability.
- Impact investing, such as affordable housing and opportunities for minority entrepreneurs, offers more effective solutions to inclusivity and sustainability issues.
- The assumption that conscious attention to ethical principles can rectify irresponsible investing is ill-founded.
- Investors are already motivated to invest wisely to protect their hard-earned money.
Sustainability and Trade-Offs
- Having a positive vision of the future requires faith and courage.
- Environmentalist movements can sometimes become anti-human, sacrificing the poor for planetary salvation.
- There is a religious belief in everyone, even those who claim not to have one.
- Priests cannot fill pews, but Jordan Peterson can fill arenas to discuss moral struggles.
- Acknowledgment of human influence on climate and the need for sustainability.
- Emphasizing the need for trade-offs and prosperity for sustainable growth.
- Prioritizing economic growth, inclusivity, and sustainability.
- Complexity of trade-offs and oversimplification in the narrative of net zero by 2050.
- The environmental emergency is complex and multi-dimensional, but can be simplified to the fundamental issue of climate change attributed to carbon dioxide.
- Oversimplification of the climate crisis can lead to a reductionist moral narrative and the avoidance of genuine moral effort.
- Identifying carbon dioxide as the villain allows individuals to proclaim moral commitment without genuine moral effort and demonize those who stand in the way.
- The oversimplification and reductionism in the environmental narrative can lead to vengeful resentment and toxic behavior towards perceived enemies.
- The combination of oversimplification, reductionism, and toxic behavior presents an apocalyptic danger.
- Five mass extinction events in the last 500 million years were caused by the planet cooling too quickly, emphasizing the complexity of environmental issues.
- The polar bear population has increased five times in the last 50 years, and the total sea rise in the last 100 years has only been 23 centimeters, with some island nations actually experiencing growth in their land.
- Human impact and carbon dioxide do matter in climate change, but they are relatively small factors compared to others that are not fully understood.
- The greenhouse gas emissions from China, India, and Russia are two and a half times that emitted by North America and the European Union combined, emphasizing the need for collective action.
- There are trade-offs in addressing climate change, and a calm, inclusive, fact-based conversation is necessary to determine the best course of action.
- Progress is being made towards sustainability, with consumers changing their investment decisions and companies like Patagonia promoting sustainability and repairable products.
- Despite the challenges posed by a growing population and an aging society, it is possible to live differently, more inclusively, and sustainably while continuing to grow.
- New ways of living need to be offered as an invitation rather than being forced on people, and a calm, fact-based conversation is essential in addressing climate change.
Free Market and Responsible Investing
- Mindfulness leads to better outcomes and a world we deserve, either in this world or the next.
- The free market’s effectiveness lies in its ability to access proper data and make trade-offs based on local circumstances.
- The problem with electric vehicles (EVs) arises from the potential strain on the power grid when everyone plugs in their cars at the same time.
- The C40 plan aims to reduce automobile ownership by 95%, suggesting a shift away from cars altogether.
- Cars provide freedom and wealth, and implementing top-down compulsory controls should be viewed with suspicion.
- Society thrives when it balances markets, good governance, and community or civic society.
- Imbalance in any of these pillars can lead to issues like environmental problems, distribution issues, or crony capitalism.
- The United States could benefit from better governance, while the NGO sector and non-profits thrive.
- Markets need to be both creative and destructive, and disruptions like Uber can be a positive force for innovation and adaptation.
- A dynamic market allows for continuous small revolutions and adaptation, which is preferable to a centralized economy’s catastrophic fits of adaptation.
- Novel technological moves like Uber may disrupt industries and cause grief, but it’s better than refusing to adapt and undergoing cataclysmic re-adaptation.
- Lessons from AI and the effective altruism movement highlight the importance of letting capital move freely and allowing innovation.
- William McAllister, a philosopher from Oxford University, discusses our responsibilities to future generations, a concept also emphasized by the Pope.
- The tension between subsidiarity and solidarity, and the need for personal responsibility and community support, are crucial for societal systems to function effectively.
- The struggle to help others and take on more responsibility is an ongoing uphill battle, as eloquently discussed at ARC.
- There are numerous organizations in the United States with proven pedagogies for improving inclusivity and sustainability without compromising economic growth, which can be replicated worldwide.
- Catholic Charities Fort Worth and Dallas have implemented a case worker program for those pursuing community college degrees, leading to a fivefold increase in completion rates and a transition from welfare dependency to work independence.
- Mentorship programs provide guidance for college-bound individuals without support.
- Teenage recidivism declines by 70% when teaching Aristotelian ethics to young individuals.
- Ready Willing and Able in New York City helps homeless and formerly incarcerated individuals transition to independence through job opportunities and communal living.
- Social bonds and social entrepreneurial programs are creating exciting solutions and changing individuals’ lives for the better.
- Renown Nevada halved homelessness rates by building affordable housing and providing support services for those in need.
- Renown Nevada has successfully addressed homelessness with proper housing and counseling, which could serve as a model for other cities like San Francisco and Los Angeles.
- Collaboration among market, state, and community is essential for inclusive and sustainable growth.
- The need for investments in affordable housing, financial inclusion, education, and health to achieve the United Nations Sustainable Development Goals by 2030.
- Affordable housing programs can provide high equity returns of 16-18% annually, making them attractive investments.
- Affordable housing can offer a 15% return, which is well above the inflation rate and meets the needs of retirees.
- The United States has a greater likelihood of leading in philanthropy and creative solutions compared to Europe, where there is minimal philanthropic giving.
- Jim Sorensen and the Sorensen Impact team in Salt Lake City have shifted their entire investment portfolio to focus on impact, outperforming the market by 100%.
- With sufficient judgment, it’s possible to have financial success while solving social and environmental problems.
- It’s crucial to ensure verifiable additionality, meaning that investments create solutions that would not occur without them.
- There are global programs like Make It Click in the UK, which teach people how to use internet services and access information, providing opportunities for volunteerism and philanthropic support.
- Volunteering to teach ethics or contributing to a greater culture of civility can bring fulfillment and combat human misery, emphasizing the importance of solidarity and being better listeners.
- The speaker criticizes ESG (Environmental, Social, and Governance) investing, suggesting that it is time to move on to better solutions.
- They emphasize the importance of wise and morally responsible investing, highlighting the need for a return on investment and supporting enterprises that align with one’s values.
- Financial health is as important as physical, emotional, and mental health, especially in an age of aging, where people need to plan for their financial future.
- The speaker advises young individuals to invest in the stock market and forget about it until they turn 65, highlighting the importance of mindful savings and investment patterns.
- Double bottom line investing requires mindfulness, deep care, and discernment.
- Predicting market behavior statistically is technically impossible, making index funds with low manager fees a better investment option.
- Only one out of five managers beats the S&P 500 over a five-year period, and only one out of 10 over a 10-year period.
- It’s not possible to be smarter than the market, so investing in low-cost index funds and bonds is recommended.
- Larry Fink, a proponent of the ESG strategy, wrote the intro to the book, showing his support for the author’s ideas.
- The author initially intended to write positively about ESG but ended up being critical of it, leading to a disagreement with BlackRock, which was resolved when Larry Fink offered to write the forward to the book.
- Larry Fink has stopped using the term ESG, considering it overly politicized and not in line with the right principles.
- Emphasizes the importance of impact investing and focusing on true double bottom line to achieve asset owners’ goals.
- As a financial advisor, stresses the importance of understanding clients’ goals and creating a portfolio solution to achieve those goals.
- During his time at BlackRock, he never sold an ESG fund, as they were not the right solution for clients’ needs.
- Worked with Pope Francis on Vatican financial reform commission and lived in the same residence as him.
- Shares a personal story about encountering a homeless man with two dogs at a mass attended by Pope Francis, highlighting the Pope’s humility and compassion.
- Pope Francis sends emissaries to invite homeless people to mass the next morning.
- Homeless person was personally invited by Pope Francis and given a shower, shampoo, and shave.
- Pope Francis established a free barbershop in Vatican City for anyone in Rome to get cleaned up.
- Pope Francis carries the burden of leading 1.2 billion souls and a politically diverse church.
- Only three monarchies left on the planet, including Pope Francis.
- Respect and admiration for Pope Francis and his efforts, despite disagreements.
- Pushing for a more progressive conversation within the Catholic Church, inspired by Jesus’ teachings.
- Need for a grown-up conversation in a world with 10 billion people, considering the future generations.
- Websites mentioned for solutions: www.1.6.com and makeitclick.com.
- Larry Fink had the largeness of mind and spirit to promote the book despite disagreements.
- The ESG movement should not be treated with cynicism, it’s important to understand its motivations.
- Providing leadership without transforming into an organization that issues top-down moral pronouncements is a difficult challenge.
- The podcasts are technically complex and meet with a receptive audience, offering hope in a challenging future full of opportunities.
- Delving into Terry’s personal background and motivations on the Daily Wire Plus platform.
- Daily Wire is attempting to do good and do well at the same time.
- It’s an honor for Mr. Kayley to be on the show.
Summary
Impact Investing and ESG
Terrence Keeley, a BlackRock executive, shares his skepticism about ethical investing strategies, particularly ESG (Environmental, Social, and Governance) investing. He discusses the unintended consequences and limitations of ESG rules and emphasizes the need for impact investing that focuses on creating real solutions, such as affordable housing and opportunities for minority entrepreneurs.
Sustainability and Trade-Offs
Keeley highlights the complexity of environmental issues and the dangers of oversimplification and reductionism in the climate crisis narrative. He emphasizes the importance of trade-offs, economic growth, inclusivity, and sustainability. Keeley also discusses the need for a calm, fact-based conversation to address climate change and promote progress towards sustainability.
Free Market and Responsible Investing
Keeley advocates for the effectiveness of free markets in delivering the future and highlights the importance of mindfulness, adaptability, and innovation. He discusses the potential strain on the power grid from electric vehicles and raises concerns about top-down controls and the need for a balanced approach to governance. Keeley also emphasizes the importance of responsible investing, financial health, and the role of personal responsibility and community support in achieving inclusive and sustainable growth.
Conclusion
Terrence Keeley’s discussion on impact investing and ESG provides valuable insights into the challenges and opportunities of ethical investing. He emphasizes the need for practical solutions, trade-offs, and a balanced approach to sustainability. Keeley’s perspective on the free market and responsible investing offers a thought-provoking perspective on the intersection of finance, social impact, and environmental concerns. Overall, this episode provides a nuanced and informative exploration of the complex issues surrounding ethical investing.
